An Evaluation of the Effect of Establishing a Minimum Economic Order Quantity (EOQ) on the Air Force EOQ Item Management System

Abstract

Policy decisions concerning the Air Force economic order quantity (EOQ) item management system affect thousands of items, billions of dollars, and the readiness of the Air Force. This thesis was initiated as a result of a March 1983 Air Force audit Agency report finding potential waste of monies because of deviation from normal procurement cycle periods (PCPs). It evaluates different PCP policies and their affect on several system performance measures for the Air Force consumable item management system. The evaluation was performed using simulation models and actual Air Force item data. The results support the audit report showing increased cost and investment as a result of larger minimum PCPs. In the first year, larger minimum PCP policies require more stock fund dollars to fund inventory growth, approximately $1211M, $1311M, and $1560M for the 3, 6, and 12 month policies respectively. After the inventory reaches its new level the differences in the annual commit dollar requirements between policies becomes insignificant.

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Document Details

Document Type
Technical Report
Publication Date
Sep 01, 1984
Accession Number
ADA147121

Entities

People

  • Thomas E. Disz

Organizations

  • Air Force Institute of Technology

Tags

Communities of Interest

  • Advanced Electronics
  • Human Systems
  • Weapons Technologies

DTIC Thesaurus Topics

  • Air Force
  • Air Force Facilities
  • Business Administration
  • Databases
  • Department Of Defense
  • Economic Analysis
  • Industrial Engineering
  • Investments
  • Logistics
  • Logistics Management
  • Maintenance
  • Materials
  • Mathematical Models
  • Molecular Orbital Theory
  • Procurement
  • Simulations
  • Social Sciences

Readers

  • Defense Financial Management and Audit.
  • Economics
  • Logistics and Supply Chain Management.